PVR Inox — Q2 FY26 earnings call

Call held 27 Oct 2025

Management summary

PVR Inox delivered a strong Q2 FY26, reporting its highest revenue, EBITDA, and PAT in two years, driven by robust box office performance across Hindi, Hollywood, and regional films. The company saw significant footfall growth and improved occupancies, while also successfully reducing its net debt to the lowest level since the merger. Despite a sequential dip in F&B SPH attributed to specific audience demographics and promotional offers, the outlook remains positive with a strong content pipeline and strategic focus on capital-light expansion and innovative formats.

Highlights

  • Total India box office grew by 15% year-on-year in H1, indicating strong industry recovery.

  • Q2 FY26 revenue, EBITDA, and PAT (adjusted for Ind AS 116) were the highest in the last 2 years, reaching ₹1,843 crores, ₹327 crores, and ₹127 crores respectively.

  • Net Debt significantly reduced to ₹619 crores, the lowest since the merger, representing a 57% reduction from merger levels.

  • Guest footfalls reached 44.5 million in Q2, the highest in 8 quarters, with occupancies improving to 28.7% from 25.7% last year.

  • Advertising revenue grew 16% YoY to ₹126 crores, marking the highest second quarter post-pandemic.

Concerns

  • F&B SPH experienced a sequential dip of 9.5% in Q2, attributed to specific film audiences (religious groups, young audience) refraining from F&B and high footfall from 'Savers Day' promotions.

  • An ongoing CCI investigation regarding VPF charges creates regulatory uncertainty, though management states it's an investigation directive, not a final finding, and premature to comment on specific measures.

Key financials

  1. Revenue (Adjusted) ₹1,843 Cr +12.2%YoY
  2. EBITDA (Adjusted) ₹327 Cr +58%YoY
  3. PAT (Adjusted) ₹127 Cr +477.3%YoY
  4. Guests 44.5 Mn +15%YoY
  5. ATP ₹262 +2%YoY
  6. F&B SPH ₹134 -9.5%QoQ
  7. Advertising Revenue ₹126 Cr +16%YoY
  8. Net Debt ₹619 Cr

What they filed

Q1 FY27: revenue up 11.9%, net profit up 203.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,622 1,717 1,230 1,450 1,823 +12%1,850 +8%1,547 +26%1,622 +12%
EBITDA479 528 289 404 612 +28%625 +18%452 +56%528 +31%
Net profit-12 36 -125 -54 106 +983%95 +164%186 +249%56 +204%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Debt Net ₹619 Cr
    As of September 2025, our net debt stood at INR619 crores, the lowest level since the merger, down INR333 crores since March 2025 and INR812 crores or 57% from merger levels.
  • Liquidity Cash ₹680 Cr Company maintains 45-60 days worth of fixed cost coverage in liquidity. Cash balance will be utilized for payments for screens under pipeline in the next 6 months.
    So Kavish, Gaurav here. Our guiding principle and strategy for cash is that because we are a fixed cost business, bulk of our costs are fixed in nature. We carry anywhere between 45 to 60 days worth of fixed cost coverage in the form of liquidity. This quarter, we have seen an increase in cash balance. But for the next 6 months, there are a lot of screens which are under pipeline for opening and payments for those screens will be released.

Guidance & targets

Screens

  • New screens signed under capital-light model Screens · over next 18-24 months · High confidence 132 screens
    During the quarter, we added 22 new screens while rationalizing eight, staying true to our capital-light and scalable growth strategy, we now have 132 screens signed under the capital-light model with 44 screens under FOCO and 88 under the asset-light model.

    — Gaurav Sharma

  • Smart screen initiative POC Screens · this year · High confidence One POC cinema
    We will have one of the smart screen cinemas coming this year as a POC.

    — Gaurav Sharma

Film Slate

  • Hindi films released per year Film Slate · per year · High confidence 8-9 films
    I would say this that we would release 8 to 9 Hindi films in a year and typically about 15 to 20 Hollywood films in a year. That's been our track record. I see no reason why this track record will not be maintained going forward.

    — Kamal Gianchandani

  • Hollywood films released per year Film Slate · per year · High confidence 15-20 films

    — Kamal Gianchandani

Performance

  • H2 FY26 Performance Performance · H2 FY26 · Medium confidence at least equal to, if not better than H1
    In the past, we have seen a very strong performance, and we expect that Q3 as well as Q4, the second half performance will be at least equal to, if not better than what we have done in H1.

    — Gaurav Sharma

  • Q4 FY26 Performance Performance · Q4 FY26 · Medium confidence very strong
    So, Q4 traditionally has been a lean quarter amongst the four quarters. But in this case, in this financial year, Q4, in fact, is going to be a very strong quarter, a, because a lot of strong films like Raja Saab and Border are releasing in January and then some of the films which were slated for December release like Romeo, with Shahid Kapoor have moved to February.

    — Kamal Gianchandani

What to watch in Q3 FY26

Smart Screen Initiative Progress

This year (first POC), then next quarter for scaling details.
Current POC (Proof of Concept) expected this year.
Target Launch of the first smart screen, and further details on scaling strategy.

Why it matters

This initiative targets Tier 2/3 cities and capital-light expansion, crucial for future growth and market penetration.

We will have one of the smart screen cinemas coming this year as a POC. And then we feel that there is a strong market there. And depending on how the POC pans out, we will take a call at what rate and at what scale we will roll it out in other parts of the market.

Risks & concerns

  • Content Volatility / Gaps in Releases

    medium

    Historically, gaps in releases and dependence on mega-blockbusters created volatility. Management noted that Q2 showed consistent supply of diverse films mitigating this.

    Management acknowledged

  • CCI Investigation on VPF

    medium

    CCI is investigating VPF charges. PVR INOX charges VPF to all non-Hollywood film producers as an industry practice to recoup digital cinema equipment investments. Status is an investigation directive, not a final finding.

    Analyst acknowledged

  • Karnataka Ticket Price Cap

    medium

    High Court upheld the stay on the price cap as of Sept 30, 2025; next hearing awaited. The outcome will impact pricing flexibility in a key state.

    Analyst acknowledged

  • Sequential dip in F&B SPH

    low

    F&B SPH dipped 9.5% QoQ due to specific film audiences (religious groups, young audience) refraining from F&B, and high footfall from 'Savers Day' promotions.

    Analyst acknowledged

Q&A highlights

7 direct
Rationale for maintaining high cash balance despite debt reduction Direct
Our guiding principle and strategy for cash is that because we are a fixed cost business, bulk of our costs are fixed in nature. We carry anywhere between 45 to 60 days worth of fixed cost coverage in the form of liquidity.

Clarifies the company's liquidity management strategy and signals future utilization of cash for screen expansion rather than immediate debt prepayment.

Asked by Kavish Parekh

Sequential dip in F&B SPH Direct
Saiyaara and Mahavatar Narsimha were the two dominant films. Mahavatar sort of worked with a certain religious clan who believed that they would not want to consume F&B from a canteen that was serving non-veg food... The four films I'm talking about is Conjuring, Baaghi, Bengal Files, Demon Slayer... And the reason three is the popularity of the Tuesdays, Savers Day, which has been racking in really well.

Provides specific, detailed reasons for a key operational metric's decline, attributing it to unique film-specific audience behavior and promotional offers rather than a systemic issue.

Asked by Jinesh Joshi

CCI investigation on VPF charges and its future Partial
So on VPF, on the CCI investigation that you are referring to, I think to the first part of your question, currently, we had we are charging VPF to all film producers and all film makers other than Hollywood... So as of now, it's -- there is no sunset or there is no such discussions. It's an important stream and the CCI order is currently an investigation directive only, it's not a final finding.

Addresses a regulatory risk, clarifying the current practice and the status of the investigation, indicating uncertainty about future impact but no immediate change.

Asked by Jinesh Joshi

Update on Karnataka ticket price cap order Direct
High Court in its order of dated 30th September has upheld the stay on the price cap. And the next date of hearing is awaited. As of now, there's no further update.

Provides a crucial update on a significant regulatory matter that could impact pricing and profitability in a key state.

Asked by Sameer Gupta

Whether blockbusters or consistent hits are better for PVR INOX Direct
It's like a cricket team. We need all players and there is different roles. So blockbusters definitely have a role to give big openings to get big numbers. And then, of course, you have these content that should sort of come good content that plays out for a couple of weeks fades out and another one comes in... So actually, there is not an either/or kind of an answer here. We need both.

Explains the company's content strategy, emphasizing the need for both mega-hits and a steady supply of diverse content for sustained performance.

Asked by Sameer Gupta

Impact of Cricket World Cup/T20 World Cup on Q4 occupancy Direct
Q4 traditionally has been a lean quarter amongst the four quarters. But in this case, in this financial year, Q4, in fact, is going to be a very strong quarter... Vis-a-vis cricket, I mean, our business has learned to co-exist with cricket... We don't see that to be a big competition.

Addresses a common seasonal concern for the entertainment industry, with management expressing confidence in Q4's strength despite sporting events, citing co-existence and a strong film slate.

Asked by Abhisek Banerjee

Aamir Khan's comments on short theatrical windows and potential shift in producer mindset Direct
We agree with Mr. Aamir Khan's statement, windows are short, and we do believe there is potential to make the windows longer... We think so. We think there is a gradual but sure shift, which is taking place in the thought process of producers.

Indicates a potential positive shift in industry dynamics regarding theatrical exclusivity, which could benefit exhibitors like PVR INOX.

Asked by Abhisek Banerjee

Producer excitement and supply for animated films Direct
You would surely see supply of more animation films. What's happened with Mahavatar Narsimha is definitely a case study... So, of course, there is a lot of excitement around animation films rooted in Indian stories. A lot of producers are thinking about it. A lot of producers are already investing money in that direction.

Highlights a new growth area in content, indicating potential for increased supply of animated films, which could diversify content offerings and attract new audiences.

Asked by Pravesh Kochar

3 min read 6 chapters

Detailed narrative

Strong Q2 & H1 FY26 Performance

PVR Inox reported its highest quarterly revenue, EBITDA, and PAT in two years for Q2 FY26, with adjusted figures of ₹1,843 crores, ₹327 crores, and ₹127 crores respectively. This strong performance was driven by a 15% YoY growth in the total India box office in H1, with 12 films crossing ₹100 crores in Q2 alone and 22 in H1, marking the highest post-COVID. The company welcomed 44.5 million guests, a 15% YoY increase, and saw occupancies improve to 28.7%.

Diverse Content Driving Growth

The quarter benefited from a consistent and diverse flow of content across Hindi, Hollywood, and regional languages. Hindi films like Saiyaara (₹400 crores) and Mahavatar Narsimha (₹300 crores) performed exceptionally, alongside star-powered movies like War 2 and Jolly LLB 3. Hollywood contributed ₹500 crores to industry collections, while regional box office saw significant growth, with Kannada up over 100% and Malayalam up 50%. This balance between content-driven successes and star-led hits signals a healthy long-term industry growth.

Operational Metrics and Affordability Initiatives

Average Ticket Price (ATP) grew 2% YoY to ₹262, while Food & Beverage Spend Per Head (F&B SPH) stood at ₹134. Advertising revenue showed strong momentum, reaching ₹126 crores, a 16% YoY increase. The company fully passed on the benefit of the recent GST rate reduction (from 12% to 5% on tickets below ₹100), making its popular 'Blockbuster Tuesday' offer available at ₹92, down from ₹99, enhancing affordability and consumer trust.

Strategic Capital Allocation and Deleveraging

PVR Inox continued its focus on financial discipline, reducing net debt to ₹619 crores as of September 2025, the lowest since the merger. This represents a reduction of ₹333 crores since March 2025 and ₹812 crores (57%) from merger levels, supported by strong operating cash flows. The company added 22 new screens while rationalizing 8, and has 132 screens signed under its capital-light model, with a healthy balance of 50% capital-light and 50% own screens planned for future growth.

Robust Content Pipeline and Q4 Outlook

The management expressed an encouraging outlook for upcoming quarters, citing a strong and diverse multi-language release slate including marquee titles like Thama, De De Pyaar De 2, Avatar: Fire and Ash, and Toxic. Despite Q4 traditionally being a lean quarter, the company expects Q4 FY26 to be 'very strong' due to specific film releases and Eid falling in March. Management also noted that the film business has learned to co-exist with cricket tournaments, which are not seen as a major competition.

Innovation and Industry Shifts

PVR Inox is piloting a 'dine-in cinema' concept in Bangalore, aiming to scale it up if successful, as part of its strategy to enhance the cinema experience. The company also plans a 'smart screen' initiative to penetrate Tier 2 and Tier 3 markets, with a Proof of Concept (POC) expected this year. Management noted a 'gradual but sure shift' in producers' mindset towards potentially longer theatrical windows, influenced by figures like Aamir Khan, which could benefit exhibitors. There is also growing excitement and investment in animation films rooted in Indian stories.

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